Can the EU really make Google and Facebook pay publishers and media?

Google logo__According to a number of media outlets of the Old Continent, the closing weeks of this summer will try to bring a major reform in the European publishing industry. As revealed last week by the Guardian and the Financial Times, the European Commission is working on a plan to give news publishers the right to demand payment from services like Google and Facebook for using their content. Despite the fact that an actual proposal will only be unveiled by Brussels in September, the plan itself sounds already like a radical change for the news industry.

A bigger plan

The measures are currently under development and there’s still a lot to find out around them, but what is already certain is that the proposals are part of a wider plan by the European Commission to weaken the dominance of internet giants in Europe, whose market share has ultimately slashed the revenues of newspapers and other traditional publishers.

A recent report published by the Guardian showed that online platforms such as Facebook will suck £450 million out of the UK news industry over the next decade. The report by strategy consultants OC&C says that, based on the impact of platforms on other mature media markets such as music, about 30% of annual digital revenue could go to platforms. That would mean the likes of Facebook and Apple taking between £200m and £250m a year this year, rising to between £400m and £450m from 2026.

Increasing pressure from publishers

Such figures suggest that the Guardian is probably more than right in saying that the Commission must have come under increasing pressure from publishers to level the playing field, after years of losses. The Financial Times indeed reports that the Commission sees the “dwindling revenues” at traditional news organisations as the core of the issue. A failure to push on with such a policy, according to the Commission’s draft document, would be “prejudicial for […] media pluralism”.

In its draft proposals, the words that the Commission reportedly uses actually leave no space for misunderstandings. “The sustainability of publishing industries in the EU may be at stake, with the risk of further negative consequences on media pluralism, democratic debate and quality of information”, as quoted by the Guardian. Therefore, the Commission will rule to let news publishers receive “exclusive rights” to make their content available online to the public, in a move that would “force services such as Google News to agree terms with news organisations” for showing extracts of articles, as revealed by the Financial Times.

Video and music content under the lens

The working document by the European Commission has also space for platforms like YouTube, Vimeo and Dailymotion, as circulated on many newspapers recently. The music industry has long complained that services such as YouTube do not pay artists adequate amounts for their music and has openly asked regulators to close the gap. Now the Commission is looking at imposing an obligation on platforms hosting user-uploaded content to seek agreements with rights holders “reflecting the economic value of the use made of the protected content”, as described in the draft documents.

YouTube uses Content ID, which automatically identifies an artist’s content, to give rights holders the choice of whether to leave it as it is, block it or monetize it through a revenue-sharing deal, and Google says that the music industry chooses to monetize 95% of its Content ID claims, generating more than $ 2 billion for rights holders. But rights holders say they do not have enough contractual power and that there’s never a fair discussion with online platforms since they have obligation to negotiate with them.

A jeopardized approach

The non-compulsory nature of the resolution and many of the aspects that online platforms have claimed as a defense of their conduct may carry the risk of creating a lot of uncertainty when the plan will be unveiled, and there could be more to come. It is true that the draft proposal already shows that the plan has been designed to be quite protective for the so called “traditional” publishing industry, but on the other hand there would be also the risk of creating a more fragmented market rather than a unified one. As an example, it is important to keep in mind that there would be no obligation on publishers to make Google pay for using their content. Many indeed may also choose to continue making their journalism available at zero cost in the hope of attracting more readers and having a broader range.

EU-US clash

What sounds almost sure, despite the huge uncertainty, is that the move will represent a new challenge for the already strained relationship between Silicon Valley and Brussels, which has been through hard times lately over issues concerning free competition, tax and privacy. The EU-Google file is more-than-ever hot and there’s a recent case of the US Treasury department attacking the Commission’s moves to obtain billions of euros from Apple for an alleged tax evasion case in the Old Continent.

The Commission seems anyway more than convinced to present the plan despite the risk of opening a real quarrel with US firms, in the name of the creation of a digital single market that stretches its borders up to this matter too. The mission has the aim of reducing the differences between national copyright schemes and now the Commission must have realized that a jeopardized approach on this topic didn’t produce good effects in the past.

Prior efforts to force internet firms to pay up in European countries such as Germany and Spain, where Google reacted to a mandatory charge by shutting down Google News, indeed show how difficult the whole endeavour will eventually be. Hence, the Commission needs to be prepared now for a powerful reaction by the US Internet giants against its desperate plans to save the lives of media moguls of this continent.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Who is responsible for public health? The tendencies and its benefits –or not– on Health Education around the world

Britain and Germany change attitude towards the European Union

The untold story of who caused and who pays for the economic crisis

Minority governments ‘à la mode’ in Europe but can they last long?

“Who do I call if I want to call Europe?” Finally a name and a number to answer Henry Kissinger’s question

EU Parliament raises burning issues over the FTA with the US

Fair completion rules and the law of gravity don’t apply to banks

Deutsche Bank: the next financial crisis is here and the lenders need €150 billion from taxpayers

The European Commission to stop Buffering

MEPs and European Youth Forum call on EU to Invest in Youth

Will ECB win against low inflation by not following Quantitave Easing?

EU responds to terror fallout by eroding borderless Europe and molesting the refugees

EU Parliament and Council: Close to agreement on the bank resolution mechanism

EU finally agrees on target for 40% greenhouse emission cuts ahead of Paris climate talks

Making money from meeting the SDGs? An overarching approach to sustainable development.

EU’s Mogherini visits Turkey “to step up engagement” and highlight interests

Diana in Vietnam

MWC 2016 LIVE: Xiaomi looks to revive growth with flagships

Italy can stand the US rating agencies’ meaningless degrading

“China is the only BRICS country to have either met or possibly slightly surpassed my expectations”, BRICS inventor Jim O’ Neil from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

Resisting EU budget cuts

EU Trust Fund for Africa: Can it be beneficial for Italy and tackle the migration crisis in the Mediterranean?

The Brits are not an exception and that’s why they voted to leave

Is the European Banking Union an impossible task?

Trump to run America to the tune of his business affairs

Council’s position on Visa Directive a step back for young people’s mobility

Civil society organisations disenchanted with “Youth Guarantee”

The financial sector cripples Eurozone growth prospects

Zhua Zhou: Choosing The Future

Is Eurozone preparing to abandon austerity and stagnation?

EU Parliament semi worried over democratic deficit

Banks cannot die but can be fined

Competing with Apple and leading innovation: Google’s world replies to EU on android charges

Does the EU want GMOs and meat with hormones from the US?

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

EU Council: Private web data to be protected by…abusers

My unlimited China

Towards a seamless internal EU market for industrial goods

Is it impossible to place the banks under control?

Who cares more about taxpayers? The US by being harsh on major banks or the EU still caressing them?

Schaeuble wants IMF out and bailouts ‘a la carte’ with Germany only to gain

The strong version of the EU banking union gains momentum

Economic sentiment and business climate stagnate in miserable euro area

Who and why want the EU-US trade agreement here and now

Draghi reserved about Eurozone’s growth prospects

“At the Environment Assembly citizens expect clean, not hot air”, the Head of UN Environment in Europe underscores in a Sting Exclusive

Q&A on the 19th China-EU Summit to be held on 01-02 June 2017 in Brussels

Doctors vs. Industry 4.0: who will win?

EU’s unsparing question to UK: now what kind of future relations do you want?

A Sting Exclusive: “Europe must be more ambitious in COP21 and lead on climate finance and sustainable development”, Green UK MEP Jean Lambert points out from Brussels

The consequences of Brexit seen by a European young entrepreneur

EU readies for eventual annulment of the Turkish agreement on immigrants-refugees

Learn from the margin, not the center: digital innovation with social impact as transformative force bridging digital divide

Tiny Iceland teaches the West how to treat bankers

What is the IMF telling Eurozone about fiscal and banking unification?

A long German political winter is on the way

Youth and children in Europe set the new perspectives for the decades to come

EU-US to miss 2015 deadline and even lose Germany’s support in TTIP’s darkest week yet

Preparing for developing countries the ‘Greek cure’

In dreams and in love there are no impossibilities

More Stings?

Comments

  1. Thanks for this post. I definitely agree with what you’re saying. I’ve been talking about this topic a whole lot lately with my brother so hopefully this will get him to see my point of view. Fingers crossed!

  2. I believe one of your advertisings triggered my internet browser to resize, you might well want to put that on your blacklist.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s